POS systems are evolving into a much more sophisticated role in providing customer satisfaction and retail revenue generation.

The explosion of touchscreen-enabled computing devices such as tablet PCs and smartphones have changed the expectations of how people interact with electronics and machines across a spectrum of industries, such as hospitality, automotive, medical, and education; but it is in the retail sector that touchscreen point-of-sale (POS) technology is seeing greatest growth, both in terms of unit shipments and technological innovation. Convenience shopping is now the preferred way for many consumers, whether shopping online or making speedy purchases in-store, and retailers are looking to innovations in technology to respond to the trend. Not only are retailers beginning to adopt omni-channelling methods in store, they are also migrating from traditional cash tills to self-service touchscreen POS systems to change the traditional checkout models and provide additional information that may boost purchases. These POS systems can already be seen at airports, libraries, shopping centres, and petrol stations.

History of the cash register

The traditional cash register has, of course, made advances since the days when they recorded data onto paper which required human assistance to transcribe information into the retailer’s accounting platforms. During the 1970s, POS systems evolved into an electrical process where registers were operated by computers, such as the IBM 3653 and NCR 2150 POS systems, and soon after barcode readers were introduced.

Throughout the 1980s and 90s, credit card devices were developed, including the Hypercom T7 Plus, which have since evolved into the processing of multiple card applications, age verification detection and wireless systems. Depending on the integrated intelligence, POS systems can do more than basic transaction registration; it can facilitate business activities, such as back office accounting, customer relation management, track sales and inventory employee scheduling and fraud audit.

Retailers have deployed compact self-service checkouts, with the aim to serve more customers, especially during peak times, and free-up staff who can then assist other areas. The innovative technology going into POS is being driven by demand: more establishments now need to facilitate transactions of some kind, from museums and galleries to coffee shop chains, and even small independent shops require transactional terminal equipment with more advanced functionality.

Research consultancy RBR predicts that by 2017, annual shipment of self-checkout terminals will be approaching 60,000 – in 2011 alone shipments grew to 26,700. That year, North America was the largest region for self-checkouts, accounting for 41 per cent of the global total. In the same year, NCR was the world’s largest vendor of self-checkout terminals, with 64 per cent of global shipments. Wincor Nixdorf’s world shipments jumped from 12 per cent to 16 per cent while Fujitsu witnessed an increase in market share from 10 per cent to 13 per cent. Large self-checkout vendor IBM, however, trails here with its 5 per cent market share.

Self-serve on the high street

In 2011, supermarket giant Tesco implemented technology company NCR’s SelfServ Checkout in stores across Central and Eastern Europe, enabling customers to scan, bag and pay for goods themselves. Research by NCR showed self-checkouts reduced queues by 40 per cent and increased customer throughput by 20 per cent. Other UK high street names that have adopted the SelfServ Checkout are Sainsbury’s, Marks & Spencer, Boots, and WHSmith.

The NCR SelfServ Checkout features a NCR-designed and manufactured RealPOS High Performance Bi-optic Scanner and Scale. The scanner can read traditional barcodes as well as 2D barcodes on mobile devices as required for loyalty apps and digital discount coupons. The integrated Optical Effects Technology claims to measure more scan lines at longer lengths and angles to capture and read all barcodes.

The security weigh scale records every product’s weight each time it is scanned, enabling the checkout to verify that the items scanned are the same as those placed in the bagging area. The ‘own bag’ feature detects the weight of the customer’s re-usable bag on the security scale, and still checks each product has been scanned correctly.

The principles of Green IT are being applied to POS technology. For instance, the NCR SelfServ Checkouts have installed two-sided thermal (2ST) receipt printers, which use up to 40 per cent less paper (it’s claimed) as it prints on both sides leaving shorter receipts. The checkouts personalise the purchasing experience by recognising those with loyalty cards and offers customers options on how to spend points. Also included is software enabling consumers to pre-pay for petrol. The final feature includes a multi-lingual platform ideal for bi-lingual populations, migrant workers and tourists.

“We have seen growth in the ‘pay my way’ trend, consumers want to be able to pay via a choice of regular tills, self-checkouts and touchscreen kiosks,” says NCR SelfServ Checkout solution specialist Greg Mann. “Retailers that simplify the consumer’s decision-to-purchase journey using these technologies can increase customer loyalty and spending levels.”

Touchscreen revolution

Mann says that the systems are designed with capacitive touchscreens which have scratch resistant hard glass and can be activated by human skin. The other type is resistive touchscreens, which use a Mylar overlay, a thin, semi-hard plastic coating, and can be activated by any pressure applying object, such as a finger, pencil or fingernail.

“The capacitive touchscreen in NCR’s self-checkouts is rated for 225 million touches in one spot and the resistive touchscreen is rated for 35 million touches in one spot,” explains Mann. “These touch ratings indicate the susceptibility to scratching. As any object can activate a resistive screen, overtime it will appear ‘foggy’ due to thousands of microscopic scratches, and this will result in a reduced lifespan.”

As touchscreen POS systems become more common in varied locations, it is important to ensure they remain clean. Mann explains how capacitive touchscreens have developed since generic touchscreen technology by incorporating CleanScreen, an antibacterial technology, which is permanently bonded to the glass. The treatment is designed to prevent bacteria and other contaminants accumulating on a screen’s surface. CleanScreen uses a proprietary antibacterial treatment marketed by AEGIS Environments and has been commercially available since 1976. It is also used in hospitals and schools.

NCR’s self-checkouts can run on Microsoft Windows and Linux operating systems, and include NCR RealPOS 80XRT PC technology with Intel single, dual, and quad-core processor options plus Intel’s Active Management Technology, which provides visibility to system wellbeing. Retailers can also deploy NCR Predictive Services, designed to pre-emptively monitor problems with components before they happen and perform full diagnosis and service dispatch before failures occur.

“As competition gets tougher, retailers expect more out of their POS systems,” adds Yuting Kao manager at POS systems vendor Firich Enterprises Co. (FEC). “The added benefit of a touchscreen POS system means that software developers can develop more dynamic programs that can allow stores to organise integrated promotional sales and membership information as well as gather important business intelligence to apply to their business practices.”

POS terminals customarily operate under intense environments which can expose the units to physical damage, misuse, and liquid spills. POS terminals are stress tested to check for efficiency under temperature changes, humidity changes and vibration. Innards also need to be robust. The AerPOS designed specifically for retail environments is combined with Intel Core i5 processor and supported by Windows XP, POSReady 2009, Windows 7, POSReady 7 and Linux.

Kao explains: “When you place your finger on the tempered glass touchscreen it causes a voltage or signal change on the screen. This change is used to determine the location of where the touch occurred. The controller then receives this information and translates it into PC language. The software driver communicates to the PC’s operating system to interpret the touch event.”

A variation of the ‘bring-your-own-device’ phenomenon is another trend that will have an effect on the POS systems of the future. Shoppers want to access pricing and product information from their own devices, such as smartphones, which also look destined to double as payment devices. According to a 2011 IBM Institute of Business Value study, 40 per cent of the sample wanted to check prices wherever they are and get promotions based on the items they scan; and 50 per cent are willing to use personal mobile devices to avoid checkout lanes.

Other POS vendors have also designed systems: the All-in-One POS terminal by HioPOS claims to be self-installable and easy to use without needing training and support. The terminal features a 15in touchscreen, receipt printer, integrated Wi-Fi and runs on operating system Windows. The Tysso POS-8000, created by FameTech, is powered by Intel Core 2 Duo processor and has the memory capacity of up to 4GB. It is supported by Windows 7, Pro, Vista and Linux. Casio’s QT-6600, designed for fast food, table service, grocery and concession stands, generates low heat and is cooled by a quiet fan. Integrated is the Intel Celeron M440 1.86 GHz processor, up to 2GB of memory and it can run on Windows WEPOS operating system and can also run XP/Pro or Vista.

The POS Elite by Harbortouch features a 15in touchscreen and features Intel’s Celeron 2.50 GHz dual-core processor. The terminal can enable users to monitor finances, track inventory and view sales history.

Given the popularity of self-service POS terminals, will they eventually replace traditional cash registers? Neil Saunders from retail research agency Conlumino’s says not. “Customer opinion on them is too divided for this to happen. While some customers value the convenience of self-service others find the machines hard to use and the whole process annoying.”

He adds: “The technology and user experience would really need to improve before this sort of technology even had a chance of replacing traditional tills. Even then, some retailers would be reluctant to take out all tills as interaction with checkout staff can be seen as an important element of customer service.”

When POS gets hacked

Cyber security is as much of an issue for POS systems as it is for any other connected computing device. POS systems have proved vulnerable to hacks, from both remote threats and from in-store security breaches.

In 2011, sandwich franchise chain Subway came under threat when more than 150 of the restaurant's franchises in the US were hacked by four Romanian nationals. The hackers compromised the credit-cards of more than 80,000 customers and used the data to make $3m of unauthorised purchases. From 2008 until May 2011, the hackers allegedly hacked into more than 200 POS systems and installed a keystroke logger and other sniffing software enabling them to steal customer credit, debit and gift-card numbers. They also placed backdoors on the systems to provide on-going access. The hackers scanned the Internet to identify vulnerable POS systems with certain remote desktop software applications installed on them, and then used the applications to log into the targeted POS system, either by guessing the passwords or using password-cracking software programs. Despite cases like the Subway hacking, retail research agency Conlumino remains optimistic about POS technology. "From a security perspective there is the issue of shrinkage through dishonesty and genuine customer error from retailers," explains Conlumino managing director, Neil Saunders. "Card fraud can also be marginally more difficult to detect, although this is not a significant problem and has been minimised with the use of chip and pin technology."